How to Do Your Taxes Online for Free

If you want to do your taxes online for free, the Internal Revenue Service (IRS) ‘Free File’ program may be right for you. Tax filers with net incomes below approximately $57,000 and younger than 50 years of age can file Federal tax returns for free using a number of online tax filing services.

These online tax venues have software that allows tax filers to input tax information and then forwards this information to the IRS. Some accounting firms that specialize in tax filing preparation charge for that service, but may also offer a free online e file as a courtesy to their clients.

The catch with several of these services is that the State filing free may not be free. For a fee however, the federal tax information can automatically be transferred over to the state tax return saving the time of duplicating and recalculating tax information.

Some State Department of Revenue Websites may offer free efiling of state taxes, however these sites may not be as fast, efficient or available as the federal free file process. However, if you just want to file a Federal tax return online for free this can be done with online tax services such as H&R Block’s ‘Free File’, ‘TaxAct’ and ‘Turbo Tax’. A more complete listing of free online tax filing platforms is available at the Internal Revenue Service starting January 15, 2010.

Free file requirements

To file taxes online for free still requires the same documentation as a paper filing, however these documents do not need to be physically submitted with the free online tax filing. Rather, the information on the tax forms and applicable paperwork for the tax year is inputted into the free online tax filing software.

Tax forms can still be mailed to the Internal Revenue Service (IRS) after filing taxes online. The information that is required is the same as for paper tax returns and may include one or more of the following tax documents or online tax forms.

• Online form 1040
• Personal information
• Account numbers
• Pin code
• Supplementary tax forms ex. Schedules A and C

The free online tax filing process can last approximately between 30 minutes and 2 hours depending on how prepared you are, and how simple or complex your taxes are. It may also take some time to acclimate with the website and software, enter all the information that is needed and properly save or print out the completed free tax filing.

In some cases live help may be available during the free online tax filing process. When filing using free file, tax refunds can be received in as little time as 2-4 weeks. Theoretically, this means someone completing an online free tax filing could have a refund as early as late January or early February if they have all the proper documentation required to file.

Additional information on free filing taxes

When an account number and routing number are given using an online tax free file service your tax return may arrive faster with no additional filing charge. Filing taxes online for free may also allow you to download a copy of the submitted tax return so that if a hard copy is needed, one is available and on record for future use such as loan applications.

Free file may also allow tax filers encrypted tax return preparation for security of financial information such as bank account number, personal information and income data. Filing taxes online for free can also simplify the process of accurately arriving at Adjusted Gross Income (AGI) and total itemized deductions numbers .

Filing taxes online for free may not be advantageous unless you 1) are owed a tax return and 2) are filing close to the tax filing deadline. Online free filing also assumes digital security which is different from paper storage of information. A sudden surge in electricity could potentially fry all the information on your tax return if not disable its submission. Server problems from the free filing provider could also slow the data submission to a very slow pace.

Another potential disadvantage of free efiling is that documentation may still need to be sent to the Internal Revenue Service in effect duplicating the effort to an extent, and sometimes the online tax return can be so lengthy that it ends up using more paper than a traditional tax return if printed. These however, are scenarios that may be avoidable in some cases. If they are avoidable, the advantages of free filing taxes may outweigh the disadvantages.

Summary

If you are confident enough in the security of doing your taxes online for free, qualify for the free filing and are owed money by the U.S. Federal Government , filing taxes for free might be a good choice. The free file program is endorsed by the U.S. Internal Revenue Service and is operated in collaboration with several online financial software providers such as those listed above.

The free file program is available to qualified tax filers within income and age limitations. According to the IRS tax returns may be received in less than 14 days in some cases. Some states may offer free online tax filing through their own websites, but this may not be as easy or an option in all cases. Nevertheless, to do taxes online for free may be a good option for some tax filers as determined by the tax filer, tax preparer or accountant.

Source:
http://www.irs.gov (U.S. Internal Revenue Service)